I cannot understand where some people are coming from regarding the proposed split of the company into separate divisions.  Somehow that issue morphed into discussing a split of the share capital...  The concept of KXL doing a share split at these levels is so ridiculous I will not even bother to comment.  But the prospect of a spin off, where the company is split into separately trading entities is likely, and a good idea that all shareholders should welcome.

I have been involved in several of these spin off plays and most of the time it results in value for shareholders.  The plan is based on the idea that investors will participate in a stock for one main play, and the exposure to other assets is therefore not valued into the stock price.  So by spinning them out to become separate companies, investors can enjoy direct leverage to new stocks that will trade on their own merits, yet not lose much in terms of the original company valuation.  And it works.

For a recent example, just consider how CS decided to split into the copper division, and the silver division, which became separately listed as SST.  I recall a few bozos on SH were pissed off at the time, but just look at the share price performance for both stocks since the spin off occurred.  The math can be expressed as:  1 + 1 = 5

For KXL, a spin off is a natural evolution, because we have distinct leverage to gold at Hercules, uranium at Otish, and base metals at Caribou, Sleeping Giant and  Golden Gate.  Each division would be able to raise capital to fund their own ongoing exploration work without ballooning the overall share structure of KXL all to hell, or diverting much needed cash from one play to another.  It makes sense.

The assays news recently reported by KXL for Sleeping Giant was pooh-poohed by many, because the focus is on gold.  For the life of me some people will never learn!  That 5.3m intercept is a big deal!  Just the Cu and Ni amounted to a gross metal value of more than $450 per tonne!  That is like hitting 5.3m of half an ounce gold per tonne.  And there is PGMs credits in there as well.  KXL is an EXPLORATION company, not just a gold company.  Positive exploration results are supposed to be good news folks...

If the market does not value Sleeping Giant highly then spin it off into a base metals play, and I guarantee you it will get noticed if they follow up with more results in line with that batch.

Anyway, its just one more iron in the fire that will unlock more value for shareholders and I hope they get the details sorted out.  I have a core position in KXL now locked up in my RRSP account, and it would be a very good thing to get bonus shares in other new juniors while still riding a big gold discovery story for years to come.

cheers!

mike